The proposed entity will be 50 per cent owned by Fortnum and 50 per cent owned by FPSA’s 20 member firms.

The deal is expected to be completed by 31 October 2015, subject to due diligence.

A joint statement by Netwealth and Fortnum said the agreement would “release” Netwealth to focus on providing superannuation, administration and “innovative investment solutions” to financial planners and accountants.

Under the proposed agreement, Netwealth will continue to provide a range of services including platform, managed account, financial planning software and compliance services to the broader Fortnum and FPSA group of 54 principal practices and 130 advisers.

Netwealth joint managing director Michael Heine said the deal would allow his company to “do what we do best, and not be in competition with our business partners”.

“We decided to partner with Fortnum because we wanted a group with the technical, compliance, practice development, business coaching and investment skills to support our advisers, but also a group that shared our commitment to championing a strong IFA market,” Mr Heine said.

“The new arrangement will deliver the scale and services required to meet the needs of professional advisers and their clients in a rapidly changing and highly regulated market,” he said.

“Netwealth is a leader in investments and administration with a reputation for delivering award-winning solutions, while Fortnum’s strength is high quality and customer-centric advice,” Mr Taylor said.

“Our principal practices enjoy being a shareholder and having a say in the direction of the AFSL but with the added benefit of scale, support and a collaborative relationship with other like-minded advisers.

“We are committed to being a leader in the advice industry and our advisers know any decisions made at the licensee level are solely in their best interests.

“Netwealth have done a very good job in recent years of ensuring they only have high quality advisers in the group; we look forward to working with them in future to continue delivering high quality advice to their clients,” Mr Taylor said.